File storage service, Rapidshare, to shutter in wake of legal woes

After years of legal trouble, the once-popular online file storage and sharing company Rapidshare is closing up shop.

In a message posted to its website Tuesday, Rapidshare said it will stop active service on March 31. "We strongly recommend all customers to secure their data. After March 31st, 2015 all accounts will no longer be accessible and will be deleted automatically," the message said.

It did not say why it is shutting down. However, legal troubles related to copyright infringement have plagued the company for years.

Legal troubles continued for the Switzerland-based service. In September 2013, Germany's Federal Court of Justice noted that online file storage services have a business model that provides an incentive to share copyright-protected material, and ordered Rapidshare to start monitoring incoming links to look for infringing files.

At that time, Rapidshare estimated it had an abuse rate of 5 percent or 6 percent, which corresponded to approximately 27,500 daily infringements, given the daily upload volume of 500,000 files.

Some file storage services depend on illegal material for their income and measures against the spread of copyright-infringing content are costly, Kuik said. If those measures are effective, revenue will drop, which is the reason file storage services will often take weak measures or stop operating altogether, Kuik added.

Loek is Amsterdam Correspondent and covers online privacy, intellectual property, online payment issues as well as EU technology policy and regulation for the IDG News Service. Follow him on Twitter at @loekessers or email tips and comments to loek_essers@idg.com

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